Dreams Die Hard

James Howard Kunstler

In The Long Emergency (2005, Atlantic Monthly Press), I said that we ought to expect the federal government to become increasingly impotent and ineffectual – that this would be a hallmark of the times.  In fact, I said that any enterprise organized at the colossal scale would function poorly in years ahead, whether it was a government, a state university, a national chain retail company, or a giant midwestern farm.  It is characteristic of the compressive contraction our society faces that giant hypercomplex systems will wobble and fail. We should expect this.

Energy Resources and Our Future

Hyman Rickover

I am honored to be here tonight, though it is no easy thing, I assure you, for a layman to face up to an audience of physicians. A single one of you, sitting behind his desk, can be quite formidable.

My speech has no medical connotations. This may be a relief to you after the solid professional fare you have been absorbing. I should like to discuss a matter which will, I hope, be of interest to you as responsible citizens: the significance of energy resources in the shaping of our future.

We live in what historians may some day call the Fossil Fuel Age. Today coal, oil, and natural gas supply 93% of the world’s energy; water power accounts for only 1%; and the labor of men and domestic animals the remaining 6%. This is a startling reversal of corresponding figures for 1850 – only a century ago. Then fossil fuels supplied 5% of the world’s energy, and men and animals 94%. Five sixths of all the coal, oil, and gas consumed since the beginning of the Fossil Fuel Age has been burned up in the last 55 years.

These fuels have been known to man for more than 3,000 years. In parts of China, coal was used for domestic heating and cooking, and natural gas for lighting as early as 1000 B.C. The Babylonians burned asphalt a thousand years earlier. But these early uses were sporadic and of no economic significance. Fossil fuels did not become a major source of energy until machines running on coal, gas, or oil were invented. Wood, for example, was the most important fuel until 1880 when it was replaced by coal; coal, in turn, has only recently been surpassed by oil in this country.

Once in full swing, fossil fuel consumption has accelerated at phenomenal rates. All the fossil fuels used before 1900 would not last five years at today’s rates of consumption.

Nowhere are these rates higher and growing faster than in the United States. Our country, with only 6% of the world’s population, uses one third of the world’s total energy input; this proportion would be even greater except that we use energy more efficiently than other countries. Each American has at his disposal, each year, energy equivalent to that obtainable from eight tons of coal. This is six times the world’s per capita energy consumption. Though not quite so spectacular, corresponding figures for other highly industrialized countries also show above average consumption figures. The United Kingdom, for example, uses more than three times as much energy as the world average.

With high energy consumption goes a high standard of living. Thus the enormous fossil energy which we in this country control feeds machines which make each of us master of an army of mechanical slaves. Man’s muscle power is rated at 35 watts continuously, or one-twentieth horsepower. Machines therefore furnish every American industrial worker with energy equivalent to that of 244 men, while at least 2,000 men push his automobile along the road, and his family is supplied with 33 faithful household helpers. Each locomotive engineer controls energy equivalent to that of 100,000 men; each jet pilot of 700,000 men. Truly, the humblest American enjoys the services of more slaves than were once owned by the richest nobles, and lives better than most ancient kings. In retrospect, and despite wars, revolutions, and disasters, the hundred years just gone by may well seem like a Golden Age.

Whether this Golden Age will continue depends entirely upon our ability to keep energy supplies in balance with the needs of our growing population. Before I go into this question, let me review briefly the role of energy resources in the rise and fall of civilizations.

Possession of surplus energy is, of course, a requisite for any kind of civilization, for if man possesses merely the energy of his own muscles, he must expend all his strength – mental and physical – to obtain the bare necessities of life.

Surplus energy provides the material foundation for civilized living – a comfortable and tasteful home instead of a bare shelter; attractive clothing instead of mere covering to keep warm; appetizing food instead of anything that suffices to appease hunger. It provides the freedom from toil without which there can be no art, music, literature, or learning. There is no need to belabor the point. What lifted man – one of the weaker mammals – above the animal world was that he could devise, with his brain, ways to increase the energy at his disposal, and use the leisure so gained to cultivate his mind and spirit. Where man must rely solely on the energy of his own body, he can sustain only the most meager existence.

Man’s first step on the ladder of civilization dates from his discovery of fire and his domestication of animals. With these energy resources he was able to build a pastoral culture. To move upward to an agricultural civilization he needed more energy. In the past this was found in the labor of dependent members of large patriarchal families, augmented by slaves obtained through purchase or as war booty. There are some backward communities which to this day depend on this type of energy.

Slave labor was necessary for the city-states and the empires of antiquity; they frequently had slave populations larger than their free citizenry. As long as slaves were abundant and no moral censure attached to their ownership, incentives to search for alternative sources of energy were lacking; this may well have been the single most important reason why engineering advanced very little in ancient times.

A reduction of per capita energy consumption has always in the past led to a decline in civilization and a reversion to a more primitive way of life. For example, exhaustion of wood fuel is believed to have been the primary reason for the fall of the Mayan Civilization on this continent and of the decline of once flourishing civilizations in Asia. India and China once had large forests, as did much of the Middle East. Deforestation not only lessened the energy base but had a further disastrous effect: lacking plant cover, soil washed away, and with soil erosion the nutritional base was reduced as well.

Another cause of declining civilization comes with pressure of population on available land. A point is reached where the land can no longer support both the people and their domestic animals. Horses and mules disappear first. Finally even the versatile water buffalo is displaced by man who is two and one half times as efficient an energy converter as are draft animals. It must always be remembered that while domestic animals and agricultural machines increase productivity per man, maximum productivity per acre is achieved only by intensive manual cultivation.

It is a sobering thought that the impoverished people of Asia, who today seldom go to sleep with their hunger completely satisfied, were once far more civilized and lived much better than the people of the West. And not so very long ago, either. It was the stories brought back by Marco Polo of the marvelous civilization in China which turned Europe’s eyes to the riches of the East, and induced adventurous sailors to brave the high seas in their small vessels searching for a direct route to the fabulous Orient. The “wealth of the Indies” is a phrase still used, but whatever wealth may be there it certainly is not evident in the life of the people today.

Asia failed to keep technological pace with the needs of her growing populations and sank into such poverty that in many places man has become again the primary source of energy, since other energy converters have become too expensive. This must be obvious to the most casual observer. What this means is quite simply a reversion to a more primitive stage of civilization with all that it implies for human dignity and happiness.

Anyone who has watched a sweating Chinese farm worker strain at his heavily laden wheelbarrow, creaking along a cobblestone road, or who has flinched as he drives past an endless procession of human beasts of burden moving to market in Java – the slender women bent under mountainous loads heaped on their heads – anyone who has seen statistics translated into flesh and bone, realizes the degradation of man’s stature when his muscle power becomes the only energy source he can afford. Civilization must wither when human beings are so degraded.

Where slavery represented a major source of energy, its abolition had the immediate effect of reducing energy consumption. Thus when this time-honored institution came under moral censure by Christianity, civilization declined until other sources of energy could be found. Slavery is incompatible with Christian belief in the worth of the humblest individual as a child of God. As Christianity spread through the Roman Empire and masters freed their slaves – in obedience to the teaching of the Church – the energy base of Roman civilization crumbled. This, some historians believe, may have been a major factor in the decline of Rome and the temporary reversion to a more primitive way of life during the Dark Ages. Slavery gradually disappeared throughout the Western world, except in its milder form of serfdom. That it was revived a thousand years later merely shows man’s ability to stifle his conscience – at least for a while – when his economic needs are great. Eventually, even the needs of overseas plantation economies did not suffice to keep alive a practice so deeply repugnant to Western man’s deepest convictions.

It may well be that it was unwillingness to depend on slave labor for their energy needs which turned the minds of medieval Europeans to search for alternate sources of energy, thus sparking the Power Revolution of the Middle Ages which, in turn, paved the way for the Industrial Revolution of the 19th Century. When slavery disappeared in the West engineering advanced. Men began to harness the power of nature by utilizing water and wind as energy sources. The sailing ship, in particular, which replaced the slave-driven galley of antiquity, was vastly improved by medieval shipbuilders and became the first machine enabling man to control large amounts of inanimate energy.

The next important high-energy converter used by Europeans was gunpowder – an energy source far superior to the muscular strength of the strongest bowman or lancer. With ships that could navigate the high seas and arms that could outfire any hand weapon, Europe was now powerful enough to preempt for herself the vast empty areas of the Western Hemisphere into which she poured her surplus populations to build new nations of European stock. With these ships and arms she also gained political control over populous areas in Africa and Asia from which she drew the raw materials needed to speed her industrialization, thus complementing her naval and military dominance with economic and commercial supremacy.

When a low-energy society comes in contact with a high-energy society, the advantage always lies with the latter. The Europeans not only achieved standards of living vastly higher than those of the rest of the world, but they did this while their population was growing at rates far surpassing those of other peoples. In fact, they doubled their share of total world population in the short span of three centuries. From one sixth in 1650, the people of European stock increased to almost one third of total world population by 1950.

Meanwhile much of the rest of the world did not even keep energy sources in balance with population growth. Per capita energy consumption actually diminished in large areas. It is this difference in energy consumption which has resulted in an ever-widening gap between the one-third minority who live in high-energy countries and the two-thirds majority who live in low-energy areas.

These so-called underdeveloped countries are now finding it far more difficult to catch up with the fortunate minority than it was for Europe to initiate transition from low-energy to high-energy consumption. For one thing, their ratio of land to people is much less favorable; for another, they have no outlet for surplus populations to ease the transition since all the empty spaces have already been taken over by people of European stock.

Almost all of today’s low-energy countries have a population density so great that it perpetuates dependence on intensive manual agriculture which alone can yield barely enough food for their people. They do not have enough acreage, per capita, to justify using domestic animals or farm machinery, although better seeds, better soil management, and better hand tools could bring some improvement. A very large part of their working population must nevertheless remain on the land, and this limits the amount of surplus energy that can be produced. Most of these countries must choose between using this small energy surplus to raise their very low standard of living or postpone present rewards for the sake of future gain by investing the surplus in new industries. The choice is difficult because there is no guarantee that today’s denial may not prove to have been in vain. This is so because of the rapidity with which public health measures have reduced mortality rates, resulting in population growth as high or even higher than that of the high-energy nations. Theirs is a bitter choice; it accounts for much of their anti-Western feeling and may well portend a prolonged period of world instability.

How closely energy consumption is related to standards of living may be illustrated by the example of India. Despite intelligent and sustained efforts made since independence, India’s per capita income is still only 20 cents daily; her infant mortality is four times ours; and the life expectance of her people is less than one half that of the industrialized countries of the West. These are ultimate consequences of India’s very low energy consumption: one-fourteenth of world average; one-eightieth of ours.

Ominous, too, is the fact that while world food production increased 9% in the six years from 1945-51, world population increased by 12%. Not only is world population increasing faster than world food production, but unfortunately, increases in food production tend to occur in the already well-fed, high-energy countries rather than in the undernourished, low-energy countries where food is most lacking.

I think no further elaboration is needed to demonstrate the significance of energy resources for our own future. Our civilization rests upon a technological base which requires enormous quantities of fossil fuels. What assurance do we then have that our energy needs will continue to be supplied by fossil fuels: The answer is – in the long run – none.

The earth is finite. Fossil fuels are not renewable. In this respect our energy base differs from that of all earlier civilizations. They could have maintained their energy supply by careful cultivation. We cannot. Fuel that has been burned is gone forever. Fuel is even more evanescent than metals. Metals, too, are non-renewable resources threatened with ultimate extinction, but something can be salvaged from scrap. Fuel leaves no scrap and there is nothing man can do to rebuild exhausted fossil fuel reserves. They were created by solar energy 500 million years ago and took eons to grow to their present volume.

In the face of the basic fact that fossil fuel reserves are finite, the exact length of time these reserves will last is important in only one respect: the longer they last, the more time do we have, to invent ways of living off renewable or substitute energy sources and to adjust our economy to the vast changes which we can expect from such a shift.

Fossil fuels resemble capital in the bank. A prudent and responsible parent will use his capital sparingly in order to pass on to his children as much as possible of his inheritance. A selfish and irresponsible parent will squander it in riotous living and care not one whit how his offspring will fare.

Engineers whose work familiarizes them with energy statistics; far-seeing industrialists who know that energy is the principal factor which must enter into all planning for the future; responsible governments who realize that the well-being of their citizens and the political power of their countries depend on adequate energy supplies – all these have begun to be concerned about energy resources. In this country, especially, many studies have been made in the last few years, seeking to discover accurate information on fossil-fuel reserves and foreseeable fuel needs.

Statistics involving the human factor are, of course, never exact. The size of usable reserves depends on the ability of engineers to improve the efficiency of fuel extraction and use. It also depends on discovery of new methods to obtain energy from inferior resources at costs which can be borne without unduly depressing the standard of living. Estimates of future needs, in turn, rely heavily on population figures which must always allow for a large element of uncertainty, particularly as man reaches a point where he is more and more able to control his own way of life.

Current estimates of fossil fuel reserves vary to an astonishing degree. In part this is because the results differ greatly if cost of extraction is disregarded or if in calculating how long reserves will last, population growth is not taken into consideration; or, equally important, not enough weight is given to increased fuel consumption required to process inferior or substitute metals. We are rapidly approaching the time when exhaustion of better grade metals will force us to turn to poorer grades requiring in most cases greater expenditure of energy per unit of metal.

But the most significant distinction between optimistic and pessimistic fuel reserve statistics is that the optimists generally speak of the immediate future – the next twenty-five years or so – while the pessimists think in terms of a century from now. A century or even two is a short span in the history of a great people. It seems sensible to me to take a long view, even if this involves facing unpleasant facts.

For it is an unpleasant fact that according to our best estimates, total fossil fuel reserves recoverable at not over twice today’s unit cost, are likely to run out at some time between the years 2000 and 2050, if present standards of living and population growth rates are taken into account. Oil and natural gas will disappear first, coal last. There will be coal left in the earth, of course. But it will be so difficult to mine that energy costs would rise to economically intolerable heights, so that it would then become necessary either to discover new energy sources or to lower standards of living drastically.

For more than one hundred years we have stoked ever growing numbers of machines with coal; for fifty years we have pumped gas and oil into our factories, cars, trucks, tractors, ships, planes, and homes without giving a thought to the future. Occasionally the voice of a Cassandra has been raised only to be quickly silenced when a lucky discovery revised estimates of our oil reserves upward, or a new coalfield was found in some remote spot. Fewer such lucky discoveries can be expected in the future, especially in industrialized countries where extensive mapping of resources has been done. Yet the popularizers of scientific news would have us believe that there is no cause for anxiety, that reserves will last thousands of years, and that before they run out science will have produced miracles. Our past history and security have given us the sentimental belief that the things we fear will never really happen – that everything turns out right in the end. But, prudent men will reject these tranquilizers and prefer to face the facts so that they can plan intelligently for the needs of their posterity.

Looking into the future, from the mid-20th Century, we cannot feel overly confident that present high standards of living will of a certainty continue through the next century and beyond. Fossil fuel costs will soon definitely begin to rise as the best and most accessible reserves are exhausted, and more effort will be required to obtain the same energy from remaining reserves. It is likely also that liquid fuel synthesized from coal will be more expensive. Can we feel certain that when economically recoverable fossil fuels are gone science will have learned how to maintain a high standard of living on renewable energy sources?

I believe it would be wise to assume that the principal renewable fuel sources which we can expect to tap before fossil reserves run out will supply only 7 to 15% of future energy needs. The five most important of these renewable sources are wood fuel, farm wastes, wind, water power, and solar heat.

Wood fuel and farm wastes are dubious as substitutes because of growing food requirements to be anticipated. Land is more likely to be used for food production than for tree crops; farm wastes may be more urgently needed to fertilize the soil than to fuel machines.

Wind and water power can furnish only a very small percentage of our energy needs. Moreover, as with solar energy, expensive structures would be required, making use of land and metals which will also be in short supply. Nor would anything we know today justify putting too much reliance on solar energy though it will probably prove feasible for home heating in favorable localities and for cooking in hot countries which lack wood, such as India.

More promising is the outlook for nuclear fuels. These are not, properly speaking, renewable energy sources, at least not in the present state of technology, but their capacity to “breed” and the very high energy output from small quantities of fissionable material, as well as the fact that such materials are relatively abundant, do seem to put nuclear fuels into a separate category from exhaustible fossil fuels. The disposal of radioactive wastes from nuclear power plants is, however, a problem which must be solved before there can be any widespread use of nuclear power.

Another limit in the use of nuclear power is that we do not know today how to employ it otherwise than in large units to produce electricity or to supply heating. Because of its inherent characteristics, nuclear fuel cannot be used directly in small machines, such as cars, trucks, or tractors. It is doubtful that it could in the foreseeable future furnish economical fuel for civilian airplanes or ships, except very large ones. Rather than nuclear locomotives, it might prove advantageous to move trains by electricity produced in nuclear central stations. We are only at the beginning of nuclear technology, so it is difficult to predict what we may expect.

Transportation – the lifeblood of all technically advanced civilizations – seems to be assured, once we have borne the initial high cost of electrifying railroads and replacing buses with streetcars or interurban electric trains. But, unless science can perform the miracle of synthesizing automobile fuel from some energy source as yet unknown or unless trolley wires power electric automobiles on all streets and highways, it will be wise to face up to the possibility of the ultimate disappearance of automobiles, trucks, buses, and tractors. Before all the oil is gone and hydrogenation of coal for synthetic liquid fuels has come to an end, the cost of automotive fuel may have risen to a point where private cars will be too expensive to run and public transportation again becomes a profitable business.

Today the automobile is the most uneconomical user of energy. Its efficiency is 5% compared with 23% for the Diesel-electric railway. It is the most ravenous devourer of fossil fuels, accounting for over half of the total oil consumption in this country. And the oil we use in the United States in one year took nature about 14 million years to create. Curiously, the automobile, which is the greatest single cause of the rapid exhaustion of oil reserves, may eventually be the first fuel consumer to suffer. Reduction in automotive use would necessitate an extraordinarily costly reorganization of the pattern of living in industrialized nations, particularly in the United States. It would seem prudent to bear this in mind in future planning of cities and industrial locations.

Our present known reserves of fissionable materials are many times as large as our net economically recoverable reserves of coal. A point will be reached before this century is over when fossil fuel costs will have risen high enough to make nuclear fuels economically competitive. Before that time comes we shall have to make great efforts to raise our entire body of engineering and scientific knowledge to a higher plateau. We must also induce many more young Americans to become metallurgical and nuclear engineers. Else we shall not have the knowledge or the people to build and run the nuclear power plants which ultimately may have to furnish the major part of our energy needs. If we start to plan now, we may be able to achieve the requisite level of scientific and engineering knowledge before our fossil fuel reserves give out, but the margin of safety is not large. This is also based on the assumption that atomic war can be avoided and that population growth will not exceed that now calculated by demographic experts.

War, of course, cancels all man’s expectations. Even growing world tension just short of war could have far-reaching effects. In this country it might, on the one hand, lead to greater conservation of domestic fuels, to increased oil imports, and to an acceleration in scientific research which might turn up unexpected new energy sources. On the other hand, the resulting armaments race would deplete metal reserves more rapidly, hastening the day when inferior metals must be utilized with consequent greater expenditure of energy. Underdeveloped nations with fossil fuel deposits might be coerced into withholding them from the free world or may themselves decide to retain them for their own future use. The effect on Europe, which depends on coal and oil imports, would be disastrous and we would have to share our own supplies or lose our allies.

Barring atomic war or unexpected changes in the population curve, we can count on an increase in world population from two and one half billion today to four billion in the year 2000; six to eight billion by 2050. The United States is expected to quadruple its population during the 20th Century – from 75 million in 1900 to 300 million in 2000 – and to reach at least 375 million in 2050. This would almost exactly equal India’s present population which she supports on just a little under half of our land area.

It is an awesome thing to contemplate a graph of world population growth from prehistoric times – tens of thousands of years ago – to the day after tomorrow – let us say the year 2000 A.D. If we visualize the population curve as a road which starts at sea level and rises in proportion as world population increases, we should see it stretching endlessly, almost level, for 99% of the time that man has inhabited the earth. In 6000 B.C., when recorded history begins, the road is running at a height of about 70 feet above sea level, which corresponds to a population of 10 million. Seven thousand years later – in 1000 A.D. – the road has reached an elevation of 1,600 feet; the gradation now becomes steeper, and 600 years later the road is 2,900 feet high. During the short span of the next 400 years – from 1600 to 2000 – it suddenly turns sharply upward at an almost perpendicular inclination and goes straight up to an elevation of 29,000 feet – the height of Mt. Everest, the world’s tallest mountain.

In the 8,000 years from the beginning of history to the year 2000 A.D. world population will have grown from 10 million to 4 billion, with 90% of that growth taking place during the last 5% of that period, in 400 years. It took the first 3,000 years of recorded history to accomplish the first doubling of population, 100 years for the last doubling, but the next doubling will require only 50 years. Calculations give us the astonishing estimate that one out of every 20 human beings born into this world is alive today.

The rapidity of population growth has not given us enough time to readjust our thinking. Not much more than a century ago our country – the very spot on which I now stand was a wilderness in which a pioneer could find complete freedom from men and from government. If things became too crowded – if he saw his neighbor’s chimney smoke – he could, and often did, pack up and move west. We began life in 1776 as a nation of less than four million people – spread over a vast continent – with seemingly inexhaustible riches of nature all about. We conserved what was scarce – human labor – and squandered what seemed abundant – natural resources – and we are still doing the same today.

Much of the wilderness which nurtured what is most dynamic in the American character has now been buried under cities, factories and suburban developments where each picture window looks out on nothing more inspiring than the neighbor’s back yard with the smoke of his fire in the wire basket clearly visible.

Life in crowded communities cannot be the same as life on the frontier. We are no longer free, as was the pioneer – to work for our own immediate needs regardless of the future. We are no longer as independent of men and of government as were Americans two or three generations ago. An ever larger share of what we earn must go to solve problems caused by crowded living – bigger governments; bigger city, state, and federal budgets to pay for more public services. Merely to supply us with enough water and to carry away our waste products becomes more difficult and expansive daily. More laws and law enforcement agencies are needed to regulate human relations in urban industrial communities and on crowded highways than in the America of Thomas Jefferson.

Certainly no one likes taxes, but we must become reconciled to larger taxes in the larger America of tomorrow.

I suggest that this is a good time to think soberly about our responsibilities to our descendants – those who will ring out the Fossil Fuel Age. Our greatest responsibility, as parents and as citizens, is to give America’s youngsters the best possible education. We need the best teachers and enough of them to prepare our young people for a future immeasurably more complex than the present, and calling for ever larger numbers of competent and highly trained men and women. This means that we must not delay building more schools, colleges, and playgrounds. It means that we must reconcile ourselves to continuing higher taxes to build up and maintain at decent salaries a greatly enlarged corps of much better trained teachers, even at the cost of denying ourselves such momentary pleasures as buying a bigger new car, or a TV set, or household gadget. We should find – I believe – that these small self-denials would be far more than offset by the benefits they would buy for tomorrow’s America. We might even – if we wanted – give a break to these youngsters by cutting fuel and metal consumption a little here and there so as to provide a safer margin for the necessary adjustments which eventually must be made in a world without fossil fuels.

One final thought I should like to leave with you. High-energy consumption has always been a prerequisite of political power. The tendency is for political power to be concentrated in an ever-smaller number of countries. Ultimately, the nation which control – the largest energy resources will become dominant. If we give thought to the problem of energy resources, if we act wisely and in time to conserve what we have and prepare well for necessary future changes, we shall insure this dominant position for our own country.

America 2.0

Jay Hanson

The “bad news” is that “peak oil” marks the beginning of the end of capitalism and market politics because many decades of declining “net energy” [1] will result in many decades of declining economic activity.And since capitalism can’t run backwards, a new method of distributing goods and services must be found. The “good news” is that our “market system” is fantastically inefficient! Americans could be wasting something like two billion tonnes of oil equivalent per year!!

In order to avoid anarchy, rebellion, civil war and global nuclear conflict, Americans must force a fundamental change in our political process. We can keep the same political structures and people, but must totally eliminate special interests from our political environment. A careful review of the progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this can be done legally and without violence. These early progressives showed how we can save our country. All that is lacking now is the political will. I call this adjustment of our political environment “America 2.0.”

To achieve America 2.0, we must first separate and isolate our political system from our economic system so that government can begin to actually address and solve societal problems rather than merely catering to corporate interests. The second step is to retire most working American citizens with an annuity sufficient for health and happiness, as government begins to eliminate the current enormous waste of vital resources by delivering goods and services directly. This would allow most adults to stay at home with their families but still receive the goods and services they need to enjoy life. …

The criterion of “profit” has shaped our political decisions since the founding of our country, but now that we are facing peak oil, new “scientific systems” criteria must replace “profit” or our civilization will “collapse” like so many others have throughout history.

In order for America to survive this crisis, a moderate, “doable” modification to our political environment is required. This paper does not attempt to describe a complete system to replace state-sponsored capitalism and market politics. My modest goal here is to show a way forward which could avoid the worst. …

Our present “business-as-usual” model, which requires endless economic growth and endless job creation, is no longer physically possible. Here’s why:

1. Business-as-usual depends upon jobs and markets to distribute goods and services.

2. Economic growth and increasing job availability require increasing net energy.

3. Net energy correlates with peak oil and both are expected to decrease for decades. …

4. Decades of decreasing net energy will cause job opportunities to decrease for decades because less and less energy will be available for economic development.

5. Globally, millions of new workers enter the job market each year, but job availability is expected to decline by millions of positions each year. Eventually, the projected high unemployment among young men will cause catastrophic political failures similar to those that led to Hitler’s takeover of German democracy. Therefore, business-as-usual is no longer a viable method of distributing goods and services and a new method must be found—and soon!

Historians will say that “peak oil” marked the end of the second free trade episode. If we don’t abandon capitalism now, we will be forced into another global war over resources. …

The “good news” is that: The Market is fantastically inefficient. Yes, that is correct: The “market system” is fantastically inefficient! Our present way of distributing goods and services wastes enormous amounts of natural resources, but gigantic resource savings are possible. As an illustration, let’s make a rough estimate of per capita food energy requirements and current waste:
If we wanted our government to distribute food directly instead of using the market, how much energy would be required to produce and deliver provisions to each and every American?

Adults need about 3,000 nutritional calories of food each day. Let’s allow 30,000 calories to produce and another 3,000 calories to deliver food to every American. That’s a total of 36,000 calories per day.

Just how much energy did the American “market system” actually consume? In 2006, Americans consumed an average of 231,008 calories per day, so 231,008 minus 36,000 equals 195,008 calories wasted each day. This simple calculation suggests that Americans could be wasting something like 2 billion tonnes of oil equivalent per year! That’s FAR more oil wasted than all the oil produced in the Middle East! …

In order to prevent collapse on the downside of the net energy curve, Americans must force corporate special interests completely out of our political environment. A careful review of the progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this can be done legally and without violence. These early progressives showed how we can save our country. All that is lacking now is the political will. I call this adjustment of our political environment “America 2.0.”

The modification that I am proposing could reduce natural resource consumption by something like 90% and greatly reduce, or possibly eliminate, civil violence caused by the inevitable post-peak-oil-economic collapse.

Our present method of distributing goods and services works something like this:

•     Our government loans money to banks, so bankers can operate businesses (which require buildings, computers, furniture, lights, air conditioning, employees, commuting, etc.)

•     The bankers then lend money to other businesses, like restaurants, real estate developers, etc. (which also require buildings, computers, commuters, advertising, accountants, etc.)

•     So the employees of these restaurants, real estate developers, etc. can buy a car and drive to the store (with even more buildings, computers, commuters, etc.)

•     Just to buy a loaf of bread!

The “market system” has to be the most inefficient organization possible! Why not simply have government pay someone to pick up that loaf of bread at the bakery and deliver it to the consumer? This is a form of distribution that would eliminate the banks, most of the other businesses, and all the stores. Most Americans would no longer need a car to commute to work or run to the store! However, some private businesses that provide critical services would still be operated but at our government’s direction.

We could use the same efficient method of distribution for everything that Americans really “need.” Shoppers would order provisions online, in the same way that Amazon or Netflix works now, and then their orders would be delivered the next day. And a medical care caravan could regularly drive through neighborhoods, filling teeth, giving checkups, and so on.

But first we must separate and isolate our political system from our economic system so that government can begin to actually address and solve societal problems rather than merely catering to corporate interests. The second step is to retire most working American citizens with an annuity sufficient for health and happiness, [10] as government begins to eliminate the current enormous waste of vital resources by delivering goods and services directly. This would allow most adults to stay at home with their families but still receive the goods and services they need to enjoy life.

Unless something is done now to prevent it, America will face anarchy, rebellion, and civil war on the downside of the net energy cliff. In order to maintain public order, the state must do one thing: take special interests totally out of politics.

The urgency, necessity, and practicality of this proposal should be apparent to all sectors of society if they could be brought to understand how our social systems are depleting our physical systems. I am convinced that if Americans were given the honest science and engineering behind what needs to be done, the vast majority would willingly make a peaceful transition to a “sustainable retreat.”

Besides wanting to sell their ephemeral products and services to an unsuspecting public, special interests also want to prevent the state from solving social pathologies because they can profit from treating the symptoms. These special interests can do no better because they are machines programmed to create profits!

ALL special interests—even universities, charities, and churches—depend on perpetual economic growth for their budgets, but the laws of thermodynamics tell us that perpetual economic growth is physically impossible. Therefore, ALL special interests must be removed from the political environment.

The first simple step is to remove the “personhood” Constitutional protections from corporations, which could probably be done by the President acting alone, via his “police powers.” Certainly it could be done by the Supreme Court or Congress if they had the political will to do so. Once corporations are firmly under democratic control, the federal government can begin correcting the abuses of capitalism as gracefully as possible. We want to preserve and include the great achievements of capitalism while removing its pathologies.

What follows are six political steps, listed in order of priority, that are designed to mitigate the societal disruptions of the net energy cliff:

1.      Remove the “personhood” Constitutional protections from corporations.

2.      Make it a federal crime for corporations to advocate anything (including, but not limited to, advertising) in the mass media.

3.      Make it a federal crime for anyone employed by a corporation to lobby elected or appointed officials directly or indirectly.

4.      Mandate public financing for elections.

5.      Assemble teams of the country’s best and brightest medical doctors, scientists, engineers and other thinkers—but no representatives of religious groups, economists, or other special interests—to recommend public policy. (We do not need a Manhattan Project for economics—on how to save the corporations and their outrageous profits; we need a Manhattan Project on how the country can survive the net energy cliff!)

6.      Encourage public debate on proposed changes.

Read the entire essay with images, footnotes, and links  by Jay Hanson …

Reposted from the Thursday, October 8, 2009 edition of The Telegraph/UK.

The world could start to run out of oil in the next ten years,
sparking soaring energy prices and a rush for even more polluting fossil fuels,
an influential new study by the UK Energy Research Council has warned.

Era of Cheap, Easy Oil is Over, Warns Study

Louise Gray

The exact date of “peak oil” – when the amount of oil being pumped out of the ground every day reaches its highest point before beginning an inexorable decline – has been hotly debated for decades. Environmentalists have tended to warn oil could run out at any moment, while oil companies insist there are plently more oil fields yet to be discovered.

Oil supplies could start running out before 2020, according to a new study. (Photo: Getty Images)

The most recent estimation from the International Energy Agency, that advises Governments around the world, said conventional oil would not peak until after 2030.However an authoriative new study from the Government-funded UK Energy Research Council called this prediction “at best optimistic and at worst implausible”. The peer-reviewed research looked at 500 studies from around the world and took into account the difficulty of accessing new oil fields as well as growing demand. It predicted oil will begin running out before 2030 and there is a “significant risk” peak oil will be reached before 2020.

“In our view, forecasts which delay a peak in conventional oil production until after 2030 are at best optimistic and at worst implausible. And given the world’s overwhelming dependence on oil and the time required to develop alternatives, 2030 isn’t far away,” said the report’s lead author Steve Sorrell. “The concern is that rising oil prices will encourage the rapid development of carbon-intensive alternatives which will make it difficult or impossible to prevent dangerous climate change.”

Robert Gross, Head of Technology and Policy Assessment at UKERC, said as soon as oil begins to run out it will make energy more expensive, sparking a knock on effect on industry and economies around the world. Petrol prices would rise and long distance travel become more expensive.

“The age of easy and cheap oil is coming to an end,” he said. “It doesn’t suddenly come to an end, obviously it’s a gradual change, but we’re moving away from easy and cheap oil to increasingly difficult and expensive oil.”

At the moment oil is around £44 ($70) per barrel after peaking at around £92 ($147) per barrel earlier in the year during the height of the economic crisis.

Dr Gross said the spectre of peak oil should encourage Governments to invest in more energy-efficient vehicles such as electric cars, renewable energy like wind or solar and improving energy efficiency in industry and homes.

But he said there was a risk that instead the world will start to look at even more intensive forms of fossil fuels, therefore producing more carbon emisions and causing “catastrophic climate change”. Alternatives include heating tar sands to produce oil at huge cost both environmentally and financially.

“The danger is high oil prices push us into high carbon resources just as much as they might help push us towards renewables,” he said.

“The challenge for policy makers is to make sure, on a global scale, that that isn’t the response to more difficult and expensive oil.”

The world produces around 85 million barrels of oil every day. It is estimated this could rise to more than 100 million barrels per day before declining.

Oil companies like BP claim billions more barrels are availabe in new oil fields discovered in the Gulf of Mexico.

However Mr Sorrell said these new supplies are extremely difficult to access and will only delay peak oil by a few weeks or even days.

Even if the new fields are exploited, he said the world needs to move away from oil in order to stop global warming.

But Mr Sorrell said the UK Government had no contingency plans for oil peaking before 2020.

“If these problems are ignored and we do not make these changes ahead of time, we are heading for trouble,” he warned.

The IEA is due to release its latest report on peak oil this November, just before the world meets in Copenhagen to decide a new deal on climate change. The report will be a key influence on whether the rich world is willing to agree to set targets to cut greenhouse gas emissions, while also helping poor countries to switch to a low carbon economy.

The Department for Energy and Climate Change is currently considering the UKERC report.

“We are already well aware of the significant challenges for investment in future oil production and that there is a role for Governments to play in reducing demand for fossil fuels,” a spokesman said. “Our climate change, energy efficiency and energy security policies outlined in the UK low carbon transition plan are not only reducing the UK’s carbon emissions, but are consistent with the need to reduce our use of fossil fuels.”

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© 2009 Telegraph

Time for a New Crisis ?

James Howard Kunstler

When Alan Greenspan predicted three percent economic growth showing up in the reported figures for the third quarter of 2009, did he mean executive compensation packages?  Maybe the lesson here is: don’t ask a crackhead to predict the future supply of crack.  Greenspan’s greatest success may be to drive economics into such disrepute that it will be cut loose from the universities and only be taught by mail order or internet subscription from the same outfits that offer PhD’s in astrology.  That is, before the universities themselves go broke.

The predicament that the USA finds itself will not be “solved” at the scale of operation that we’re accustomed to, and we should just stop wasting precious time and dwindling resources in the idle hope that it will be.  The failure to recognize this dynamic is the most impressive part of the meltdown.  The only thing that the federal government is likely to prove in the process is the ineffectiveness of its actions as applied to any of the raging current problems from the killing burden of hyper-debt to the brushfires of geopolitics. Congress will only make the health care system more complex. Both congress and President Obama will do everything possible to keep housing prices unaffordable — in a quixotic effort to protect the collateral of the big banks. Capital will continue to vanish in the black hole of default.

Something’s got to give in the remaining three months of 2009.  My guess is that attention will shift overseas for a while.  This will not be due, as many probably think, to a cynical effort by the government to divert attention from the financial fiasco, but because the intrinsic tensions in the Middle East are reaching the snapping point.  Iran is being called out on its nuclear program.  If, from the start, it had just maintained the need for electric generating power in the face of dwindling fossil fuel reserves, they might have gone unchallenged.  As it happened, though, the elected leader of Iran made too many intemperate remarks about wiping other nations off the face of the earth, and this has only prompted the leaders of other nations to take his remarks at face value and presume that Iran’s nuclear program was devoted to armaments, not electric power generation.

So, now the USA has picked up the gauntlet.  If Iran doesn’t act to demonstrate the de-activation of its bomb-making capacity, then the USA will try to impose sanctions depriving Iran of necessary imported supplies. (Iran actually imports gasoline, due to inadequate refineries.)  For sanctions to be effective, support will be required by other nations, including Iran’s chief gasoline supplier, China.  What a delicate calculus this will be!  I rather imagine that China would not like to see the Middle East blow up. I’m not so sure about the nations of the Middle East though, or at least major parties in certain nations.  The rulers of Saudi Arabia would probably enjoy seeing Iran get into big trouble, since Iran is Saudi Arabia’s most active antagonist, working tirelessly to destabilize the Kingdom. Al Qaeda interests dispersed in many nations would certainly cheer any mayhem.  The Taliban would love anything that takes the spotlight off them in Afghanistan.  The Russians are conflicted between the wish to enhance their own leverage in world affairs and their need to discipline Islamic maniacs along their own borders.  Europe is probably scared to death of anything that might threaten their energy lifeline.  Pakistan is too tormented to have a position, but its radical Islamist factions are probably on the side of disorder — as the best remedy for the status quo.  If any of that spills over on India, as in the Mumbai bombing, then that flashpoint could turn to conflagration very quickly.  We forget about Turkey, which was the hegemonic player in the region for centuries until its swift decline after 1914, but it has potent military capability and very mixed feelings about the the Jihad to ruin the West (since it is partly of the West).  And finally there is Israel, the object of Iran’s intemperate public statements.

This is a dangerous situation.  I’m not so sure that Israel could launch an effective attack on Iran’s nuclear infrastructure, but it might try anyway, especially if a US-backed sanctions effort fails to coalesce quickly.  I’m not sure Israel would seek permission from the US to do this, though the US would certainly be tasked with defending the shipping lanes in the Persian Gulf. Iran might succeed in sinking more than a couple of US ships-of-the-line with sunburn missles and other toys, and this would lead to the bigger danger of oil supplies being choked off to the rest of the world. The US air response would be impressive, but possibly not effective against hardened targets. The leaders of Iran might exult even if the Iranian people were swept into a maelstrom.  I imagine that what followed would be a very extravagant military frenzy amounting to World War Three, with European air forces and navies dragged in, with Hezbollah and Syria striking back at Israel, India and Pakistan possibly incinerating each other, and mayhem galore among the bystanders in Iraq, Egypt, Saudi Arabia, and Afghanistan. There could easily be internal mischief in the UK, France, and Germany from angry immigrant populations, and “sleepers” could work some overdue hoodoo in the USA.  I don’t know what Turkey would do, but it could be the biggest beneficiary of a bad regional meltdown, providing the only effective governance what remains in the region. China and Japan would probably just gape at the spectacle in wonder and nausea from the sidelines as they saw their energy supplies for years-to-come go up in flames.

The G-20 nations would be crippled as global oil supplies were choked off indefinitely.  And if anyone — Iran, or its friends inside the Kingdom — managed to pull off a stunt such as blowing up the Ras Tanura oil terminal — then a darkness will spread across places that were used to being lighted and they will stay dark a long time.

I don’t know if any of this will come to pass, but as I said, tensions have reached a breaking point, including the greater tensions of history, which seem to require periodic release no matter how poignant the Pete Seegar songs are.  It is perhaps, just another prime symptom of “overshoot,” the world’s way of shedding some of the toxic organisms that are making it so unhappy — Gaia in a really bad mood.

If nothing develops along these lines on the geopolitical scene, the USA is still stuck in its predicament of trying desperately to maintain an overscaled living arrangement, with no coherent public discussion of downscaling, re-scaling, or re-arranging things.  My guess is that this kind of restructuring only occurs when all other options have been exhausted. The last time the USA found itself in an intractable economic morass, World War Two came along and it made things all better here (after considerable sacrifice for us and catastrophe elsewhere). After World War Two, we ruled the world for a couple of generations. The outcome of World War Three would not be so favorable for us. At the very least, it would leave us attempting to run things on about one-quarter of the oil we’re used to. That does not suggest a seamless transition between how we behave now and how the future will require us to behave differently.

GIFTegrity—an Alternative to Market

Specifications for a GIFTegrity

Original Sin

James Howard Kunstler

In our history, the American nation committed obvious sins against select groups of people, and we’ve paid bitterly for some of that.  But now it’s our sins against the land itself that threaten to sink the USA as a viable enterprise.

It’s odd, that in his otherwise excellent blow-by-blow account (“Eight Days,” in the Sept 21 New Yorker Magazine) of the September 2008 Wall Street meltdown that left Lehman dead, and AIG croaking in a ditch, and the banking system in general functionally crippled, reporter James B. Stewart never got around to really describing the cause of it all — namely, the on-the-ground material catastrophe of American suburbia.

It was the worthlessness of the tradable securitized debt associated with all those overpriced (and overvalued) chipboard and vinyl houses, smeared recklessly over the American landscape, that started all the trouble in the first place.  And it is our inability to come to grips with that underlying catastrophe that prolongs the resolution of the still-florid banking crisis — since the federal government is doing everything possible to prop up the failed capital equation of terminal suburbia, and to deny the obsolescence of that version of the American Dream and all the mechanisms for delivering it.

The suburban project was not a conspiracy by the likes of Robert Moses, Walt Disney, Frank Lloyd Wright, and President Eisenhower to produce a living arrangement with no future.  It was the emergent, self-organizing result of special circumstances in a particular time and place: post World War Two America, with an immense supply of cheap oil, cheap land, and the industrial capacity to churn out all the necessary components for a car-dependent development pattern.  Suburbia was spawned out of a couple of persistent themes in American cultural history: 1.) that cities and city life were no good; 2.) and that the romance of settling the wilderness could be reenacted, at great profit, in all that space beyond the towns and cities. It would be silly to deny the appeal of this arrangement at its inception.  By the end of WW II, city life in the popular imagination was reduced to one potently awful image: Ralph Kramden’s apartment in “The Honeymooners” TV show.

There had to be something better than that. Suburbia was engineered as the antidote to the Kramden’s apartment: country-living-for-everybody. The evacuation of the cities to the new outlands proceeded as relentlessly as the landings at Normandy.  It wasn’t until the program was well underway that the self-destructive essence of it became obvious — that every new housing subdivision killed the original rural character of the land, with the result that suburban life quickly became a cartoon of country living in a cartoon of a country house in a cartoon of the country. With additional layer-on-layer of, first, the shopping in the form of highway strips, then malls, along with the office “parks,” these places elaborated themselves into a kind of cancer-of-the-landscape, a chronic and expensive condition that Americans had no choice but to live with, because of the monumental investments they had already made in it.  The discontents it produced lent it to psychological depression and dark humor, just as chronic illness does.  But we were stuck with it.

Meanwhile, all the machinery of culture and politics made it impossible to construct anything differently. The exquisitely fine-tuned planning-and-zoning codes generated by the thousands of town boards mandated a suburban outcome everywhere — with plenty of help from the DOT traffic engineers, the fire marshals, and the even the mandarins of academia who trained all these professionals.  As a natural consequence of all this, the disinvestment in cities — especially the older cities of the industrial heartland — continued remorselessly until it seemed as if the Second World War had taken place in St. Louis and Cleveland.

This mode of behavior persisted through the first, short-lived oil scarcity tremors of the 1970s. It was so completely embedded in the popular imagination that it had become the baseline American identity. The suburban project caught a second wind in the 1990s, when the last great non-OPEC oil fields of the North Sea, Alaska, and Siberia nullified the grip of the Islamic cartel for while, and sent the price of oil down to $11-a-barrel.  Ironically, it was during those years that the warnings of “peak oil” first circulated beyond the geology offices, and it was clear to anyone who reflected on the connections that the project of suburbia was doomed.
It was also ironic, tragically so, that during this same period Wall Street began to seek some new way to make real money beyond stock and bond markets, which didn’t seem to produce wealth at all for more than a decade when inflation was factored in.  By a fortuitous coincidence, the revolution in computers enabled Wall Street bankers to concoct abstruse new species of tradable paper securities based on bundles of debt that seemed to produce miraculous earnings. It had the added advantage of being inscrutable to both investors and financial regulators. Due diligence became impossible and moral hazard spread like ringworm in a dormitory. The bulk of the securitized debt originated in home mortgages and the larger result was a gigantic racket ramped up between Wall Street and the US government to conceal all the structural weaknesses of a de-industrialized US economy behind a hyperbolic commerce in the very thing that the American public cherished most: their houses, which, understandably, everybody had come to call “homes.” Wall Street might as easily have commoditized mother and apple pie – if you could sell each one for half a million dollars.

The banking fiasco still underway is at once a proxy for the larger failure of the American economy and the greatest fissure in it.  Put as simply possible: we can’t service our debt, we can’t generate more debt, and the notional “capital” we thought we possessed is dissolving into nothingness.  The federal government and Wall Street remain committed to supporting all the rackets associated with a suburban sprawl economy that has entered its own zone of remorseless failure.  It is failing as a capital investment first, and is secondarily failing as a practical living arrangement.  The two failures will continue in a close race toward terminal entropy.
The dirty secret all along was that by 2005 there was no economy left in the USA beyond the suburban sprawl economy with its so-called “consumer” nexus — largely devoted to the outfitting of suburbia.  More mortgage debt (and credit card and car loan debt) will go bad and the investment paper that represents it will go bad and it will eventually destroy our current system for accumulating, valuing, and deploying wealth.  It will not destroy the function of capital — no matter how many angry intellectuals inveigh against the straw man of capital-ism, as if it were merely a belief system – but it will be a long long time before anything sturdy or credible in the way of banking will be reconstructed out of the wreckage.

Visit James Howard Kunstler’s website.

Sick and Wrong

How Washington is screwing up health care reform – and why it may take a revolt to fix it!

Matt Taibbi

Let’s start with the obvious: America has not only the worst but the dumbest health care system in the developed world. It’s become a black leprosy eating away at the American experiment — a bureaucracy so insipid and mean and illogical that even our darkest criminal minds wouldn’t be equal to dreaming it up on purpose.

The system doesn’t work for anyone. It cheats patients and leaves them to die, denies insurance to 47 million Americans, forces hospitals to spend billions haggling over claims, and systematically bleeds and harasses doctors with the specter of catastrophic litigation. Even as a mechanism for delivering bonuses to insurance-company fat cats, it’s a miserable failure: Greedy insurance bosses who spent a generation denying preventive care to patients now see their profits sapped by millions of customers who enter the system only when they’re sick with incurably expensive illnesses.

The cost of all of this to society, in illness and death and lost productivity and a soaring federal deficit and plain old anxiety and anger, is incalculable — and that’s the good news. The bad news is our failed health care system won’t get fixed, because it exists entirely within the confines of yet another failed system: the political entity known as the United States of America.

Just as we have a medical system that is not really designed to care for the sick, we have a government that is not equipped to fix actual crises. What our government is good at is something else entirely: effecting the appearance of action, while leaving the actual reform behind in a diabolical labyrinth of ingenious legislative maneuvers.

Over the course of this summer, those two failed systems have collided in a spectacular crossroads moment in American history. We have an urgent national emergency on the one hand, and on the other, a comfortable majority of ostensibly simpatico Democrats who were elected by an angry population, in large part, specifically to reform health care. When they all sat down in Washington to tackle the problem, it amounted to a referendum on whether or not we actually have a functioning government.

It’s a situation that one would have thought would be sobering enough to snap Congress into real action for once. Instead, they did the exact opposite, doubling down on the same-old, same-old and laboring day and night in the halls of the Capitol to deliver us a tour de force of old thinking and legislative trickery, as if that’s what we really wanted. Almost every single one of the main players — from House Speaker Nancy Pelosi to Blue Dog turncoat Max Baucus — found some unforeseeable, unique-to-them way to fuck this thing up. Even Ted Kennedy, for whom successful health care reform was to be the great vindicating achievement of his career, and Barack Obama, whose entire presidency will likely be judged by this bill, managed to come up small when the lights came on.

We might look back on this summer someday and think of it as the moment when our government lost us for good. It was that bad.

Here’s where we are right now: Before Congress recessed in August, four of the five committees working to reform health care had produced draft bills. On the House side, bills were developed by the commerce, ways and means, and labor committees. On the Senate side, a bill was completed by the HELP committee (Health, Education, Labor and Pensions, chaired by Ted Kennedy). The only committee that didn’t finish a bill is the one that’s likely to matter most: the Senate Finance Committee, chaired by the infamous obfuscating dick Max Baucus, a right-leaning Democrat from Montana who has received $2,880,631 in campaign contributions from the health care industry.

The game in health care reform has mostly come down to whether or not the final bill that is hammered out from the work of these five committees will contain a public option — i.e., an option for citizens to buy in to a government-run health care plan. Because the plan wouldn’t have any profit motive — and wouldn’t have to waste money on executive bonuses and corporate marketing — it would automatically cost less than private insurance. Once such a public plan is on the market, it would also drive down prices offered by for-profit insurers — a move essential to offset the added cost of covering millions of uninsured Americans. Without a public option, any effort at health care reform will be as meaningful as a manicure for a gunshot victim. “The public option is the main thing on the table,” says Michael Behan, an aide to Sen. Bernie Sanders of Vermont. “It’s really coming down to that.”

The House versions all contain a public option, as does the HELP committee’s version in the Senate. So whether or not there will be a public option in the end will likely come down to Baucus, one of the biggest whores for insurance-company money in the history of the United States. The early indications are that there is no public option in the Baucus version; the chairman hinted he favors the creation of nonprofit insurance cooperatives, a lame-ass alternative that even a total hack like Sen. Chuck Schumer has called a “fig leaf.”

Even worse, Baucus has set things up so that the final Senate bill will be drawn up by six senators from his committee: a gang of three Republicans (Chuck Grassley of Iowa, Olympia Snowe of Maine, Mike Enzi of Wyoming) and three Democrats (Baucus, Kent Conrad of North Dakota, Jeff Bingaman of New Mexico) known by the weirdly Maoist sobriquet “Group of Six.” The setup senselessly submarines the committee’s Democratic majority, effectively preventing members who advocate a public option, like Jay Rockefeller of West Virginia and Robert Menendez of New Jersey, from seriously influencing the bill. Getting movement on a public option — or any other meaningful reform — will now require the support of one of the three Republicans in the group: Grassley (who has received $2,034,000 from the health sector), Snowe ($756,000) or Enzi ($627,000).

This is what the prospects for real health care reform come down to — whether one of three Republicans from tiny states with no major urban populations decides, out of the goodness of his or her cash-fattened heart, to forsake forever any contributions from the health-insurance industry (and, probably, aid for their re-election efforts from the Republican National Committee).

This, of course, is the hugest of long shots. But just to hedge its bets even further and ensure that no real reforms pass, Congress has made sure to cover itself, sabotaging the bill long before it even got to Baucus’ committee. To do this, they used a five-step system of subtle feints and legislative tricks to gut the measure until there was nothing left.

STEP ONE: AIM LOW

Heading into the health care debate, there was only ever one genuinely dangerous idea out there, and that was a single-payer system. Used by every single developed country outside the United States (with the partial exceptions of Holland and Switzerland, which offer limited and highly regulated private-insurance options), single-payer allows doctors and hospitals to bill and be reimbursed by a single government entity. In America, the system would eliminate private insurance, while allowing doctors to continue operating privately.

In the real world, nothing except a single-payer system makes any sense. There are currently more than 1,300 private insurers in this country, forcing doctors to fill out different forms and follow different reimbursement procedures for each and every one. This drowns medical facilities in idiotic paperwork and jacks up prices: Nearly a third of all health care costs in America are associated with wasteful administration. Fully $350 billion a year could be saved on paperwork alone if the U.S. went to a single-payer system — more than enough to pay for the whole goddamned thing, if anyone had the balls to stand up and say so.

Everyone knows this, including the president. Last spring, when he met with Rep. Lynn Woolsey, the co-chair of the Congressional Progressive Caucus, Obama openly said so. “He said if he were starting from scratch, he would have a single-payer system,” says Woolsey. “But he thought it wasn’t possible, because it would disrupt the health care industry.”

Huh? This isn’t a small point: The president and the Democrats decided not to press for the only plan that makes sense for everyone, in order to preserve an industry that is not only cruel and stupid and dysfunctional, but through its rank inefficiency has necessitated the very reforms now being debated. Even though the Democrats enjoy a political monopoly and could have started from a very strong bargaining position, they chose instead to concede at least half the battle before it even began.

Obama wasn’t the only big Democrat to mysteriously abandon his position on single-payer. House Speaker Nancy Pelosi and Rep. Henry Waxman, the influential chair of the House commerce committee, have both backed away from their longtime support of single-payer. Hell, even Max-freaking-Baucus once conceded the logic of single-payer, saying only that it isn’t feasible politically. “There may come a time when we can push for single-payer,” he said in February. “At this time, it’s not going to get to first base in Congress.”

And helping it not get to first base was … Max Baucus. It was Baucus’ own committee that held the first round-table discussions on reform. In three days of hearings last May, he invited no fewer than 41 people to speak. The list featured all the usual industry hacks, including big insurers like America’s Health Insurance Plans (AHIP), Blue Cross and Aetna. It’s worth noting that several of the organizations invited — including AHIP and Amgen — employ several former Baucus staffers as lobbyists, including two of his ex-chiefs of staff.

Not one of the 41 witnesses, however, was in favor of single-payer — even though eliminating the insurance companies enjoys broad public support. Leading advocates of single-payer, including doctors from the Physicians for a National Health Program, implored Baucus to allow them to testify. When he refused, a group of eight single-payer activists, including three doctors, stood up during the hearings and asked to be included in the discussion. One of the all-time classic moments in the health care reform movement came when the second protester to stand up, Katie Robbins of Health Care Now, declared, “We need single-payer health care!”

To which Baucus, who looked genuinely frightened, replied, “We need more police!”

The eight protesters were led away in handcuffs and spent about seven hours in jail. “It’s funny, the policemen were all telling us their horror stories about health care,” recalls Dr. Margaret Flowers, one of the physicians who was jailed. “One was telling us about his mother who was 62 and lost her job and was uninsured, waiting to get Medicare when she was 65.” The protesters were sentenced to six months’ probation. Baucus later met with them and conceded that not including single-payer advocates in the discussion had been a mistake, although it was “too late” to change that.

Single-payer advocates have had an equally tough time getting a hearing with the president. In March, the White House refused to allow Rep. John Conyers to invite two physicians who support single-payer to the health care summit that Obama was holding to kick off the reform effort. Three months later, a single-payer advocate named David Scheiner, who served as Obama’s physician for 22 years, was mysteriously bumped from a prime-time forum on health care, where he had been invited to ask the president a question.

Many of the health care advisers in Obama’s inner circle, meanwhile, are industry hacks — people like Nancy-Ann DeParle, the president’s health care czar, who has served on the boards of for-profit companies like Medco Health Solutions and Triad Hospitals. DeParle is so unthreatening to the status quo that Karen Ignagni, the insurance industry’s leading lobbyist-gorgon, praised her “extensive experience” and “strong track record.”

Behind closed doors, Obama also moved to cut a deal with the drug industry. “It’s a dirty deal,” says Russell Mokhiber, one of the protesters whom Baucus had arrested. “The administration told them, ‘Single-payer is off the table. In exchange, we want you on board.’” In August, the Pharmaceutical Research and Manufacturers of America announced that the industry would contribute an estimated $150 million to campaign for Obamacare.

Even the Congressional Progressive Caucus, whose 80-plus members have overwhelmingly supported single-payer legislation in the past, decided not to draw a line in the sand. They agreed to back down on single-payer, seemingly with the understanding that Pelosi would push for a strong public option — a sort of miniversion of single-payer, a modest, government-run insurance plan that would serve as a test model for the real thing. But one of the immutable laws of politics in the U.S. Congress is that progressives will always be screwed by their own leaders, as soon as the opportunity presents itself. And with a bill the size and scope of health care, there was plenty of opportunity.

STEP TWO: GUT THE PUBLIC OPTION

Once single-payer was off the table, the Democrats lost their best bargaining chip. Rather than being in a position to use the fear of radical legislation to extract concessions from the right — a position Obama seemingly gave away at the outset, by punting on single-payer — Republicans and conservative Blue Dog Democrats suddenly realized that they had the upper hand. Pelosi and Senate Majority Leader Harry Reid would now give away just about anything to avoid having to walk away without a real health care bill.

The situation was made worse as the flagging economy ate away at Obama’s political capital. Polls showed the percentage of “highly engaged” Democrats plummeting, while the percentage of “highly engaged” Republicans — inspired by idiotic scare stories from Rush Limbaugh and Sarah Palin about socialized medicine and euthanasia — rose rapidly. By late summer, “the depth of Republican support was starting to rival the breadth of Democratic support,” said noted statistician Nate Silver. The more the Republicans and Blue Dogs fidgeted and fucked around, the easier it would be for them to kill the public option. Democrats, who on the morning after Election Day could have passed a single-payer system without opposition, were now in a desperate hurry to make a deal.

The public option is hardly a cure-all: Among other things, it does nothing to reduce the $350 billion a year in unnecessary paperwork and administrative overhead that makes the current system so expensive and maddening. “That’s one of the big issues,” says an aide to a member of the progressive caucus. “None of this addresses the paperwork issue. It might even make it worse.” But the basic idea of the public option is sound enough: create a government health plan that citizens could buy through regulated marketplaces called insurance “exchanges” run at the state level. Simply by removing the profit motive, the government plan would be cheaper than private insurance. “The goal here was to offer the rock-bottom price, the Walmart price, so that people could buy insurance practically at cost,” says one Senate aide.

The logic behind the idea was so unassailable that its opponents often inadvertently found themselves arguing for it. “Assurances that the government plan would play by the rules that private insurers play by are implausible,” groused right-wing douchebag George Will. “Competition from the public option must be unfair, because government does not need to make a profit and has enormous pricing and negotiating powers.” In other words, if you offer a public plan that doesn’t systematically fuck every single person in the country by selling health care at inflated prices and raking in monster profits, private insurers just won’t be able to compete.

Will wasn’t the only prominent opponent of reform openly arguing in favor of the insurance industry’s right to continue doing business inefficiently. Sen. Ben Nelson, who together with Baucus are the Laverne and Shirley of turncoat Democrats, complained that the public option “would win the game.” Senate Minority Leader Mitch McConnell admitted that “private insurance will not be able to compete with a government option.” This is a little like complaining that Keanu Reeves was robbed of an Oscar just because he can’t act.

For a while, the public option looked like it might have a real chance at passing. In the House, both the ways and means committee and the labor committee passed draft bills that contained a genuine public option. But then conservative opponents of the plan, the so-called Blue Dog Democrats, mounted their counterattack. A powerful bloc composed primarily of drawling Southerners in ill-fitting suits, the Blue Dogs — a gang of puffed-up political mulattos hired by the DNC to pass as almost-Republicans in red-state battlegrounds — present themselves as a quasi-religious order, worshipping at the sacred altar of “fiscal responsibility” and “deficit reduction.” On July 9th, in a harmless-sounding letter to Pelosi, 40 Blue Dogs expressed concern that doctors in the public option “must be fairly reimbursed at negotiated rates, and their participation must be voluntary.” Paying doctors “using Medicare’s below-market rates,” they added, “would seriously weaken the financial stability of our local hospitals.”

The letter was an amazing end run around the political problem posed by the public option — i.e., its unassailable status as a more efficient and cheaper health care alternative. The Blue Dogs were demanding that the very thing that makes the public option work — curbing costs to taxpayers by reimbursing doctors at Medicare rates plus five percent — be scrapped. Instead, the Blue Dogs wanted compensation rates for doctors to be jacked up, on the government’s tab. The very Democrats who make a point of boasting about their unwavering commitment to fiscal conservatism were lobbying, in essence, for a big fat piece of government pork for doctors. “Cost should be the number-one concern to the Blue Dogs,” grouses Rep. Woolsey. “That’s why they’re Blue Dogs.”

In the end, the Blue Dogs won. When the House commerce committee passed its bill, the public option no longer paid Medicare-plus-five-percent. Instead, it required the government to negotiate rates with providers, ensuring that costs would be dramatically higher. According to one Democratic aide, the concession would bump the price of the public option by $1,800 a year for the average family of four.

In one fell swoop, the public plan went from being significantly cheaper than private insurance to costing, well, “about the same as what we have now,” as one Senate aide puts it. This was the worst of both worlds, the kind of take-the-fork-in-the-road nonsolution that has been the peculiar specialty of Democrats ever since Bill Clinton invented a new way to smoke weed. The party could now sell voters on the idea that it was offering a “public option” without technically lying, while at the same time reassuring health care providers that the public option it was passing would not imperil the industry’s market share.

Even more revolting, when Pelosi was asked on July 31st if she worried that progressives in the House would yank their support of the bill because of the sellout to conservatives, she literally laughed out loud. “Are the progressives going to take down universal, quality, affordable health care for all Americans?” she said, chuckling heartily to reporters. “I don’t think so.”

The laugh said everything about what the mainstream Democratic Party is all about. It finds the notion that it has to pay anything more than lip service to its professed values funny. “It’s a joke,” complains one Democratic aide. “This is all a game to these people — and they’re good at it.”

The concession to the Blue Dogs comes at a potentially disastrous price: Without a public option that drives down prices, the cost of other health care reforms being considered by Congress will almost certainly skyrocket. The trade-off with conservatives might be understandable, if those other reforms were actually useful. But this is Congress we’re talking about

STEP THREE: PACK IT WITH LOOPHOLES

Even seasoned congressional aides, who are accustomed to sitting through long and boring committee meetings, have found the debate over health care reform uniquely torturous. Unlike other congressional matters, where there is at least a feeling that the process might at some point be completed, the endless sessions over health care have led many staffers to fear that they will be locked in hearing rooms for the rest of their lives, listening to words like “target” and “mandate” and “doughnut hole” being repeated ad nauseam by weary, gray-faced, saggy-necked legislators — who begin, after weeks of self-inflated posturing, to look like the ugliest people in the universe. “You come out of these hearings,” says Behan, the aide to Sen. Sanders, “and the number of interconnected, moving pieces going in and out of these bills is insane — the case for single-payer health insurance makes itself.”

For those looking to fuck up health care reform — or to load it up with goodies for their rich pals — the tedium actually serves a broader purpose. Given that five different committees are weighing five different and often competing paths to reform, it’s not surprising that all sorts of bizarre crap winds up buried in their bills, stuff no one could possibly have expected to be in there. The most glaring example, passed by Ted Kennedy’s HELP committee, would allow the makers of complex drugs known as “biologics” to keep their formulas from being copied by rivals for 12 years — twice as long as the protection for ordinary pharmaceuticals. The notion that an effort ostensibly aimed at curbing health care costs would grant the pharmaceutical industry lucrative new protections against generic drugs is even weirder when you consider that earlier proposals, including one supported by Obama, would have protected brand-name drugs for only seven years.

Another favor to industry buried in the bills involves the issue of choice. From the outset, Democrats have been careful to make sure that a revamped system would not in any way force citizens to give up their existing health care plans. As Obama told the American Medical Association in June, “If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”

That sounds great, particularly in conjunction with the new set of standards for employer-provided insurance outlined in the House version of reform. Under the bill — known as HR 3200 — employers must provide “essential benefits” to workers or face a stiff penalty. “Essential benefits” includes elements often missing in the fly-by-night plans offered by big employers: drug benefits, outpatient care, hospitalization, mental health, the works. If your employer does not offer acceptable coverage, you then have the right to go into one of the state-run insurance “exchanges,” where you can select from a number of insurance plans, including the public option.

There’s a flip side, though: If your employer offers you acceptable care and you reject it, you are barred from buying insurance in the insurance “exchange.” In other words, you must take the insurance offered to you at work. And that might have made sense if, as decreed in the House version, employers actually had to offer good care. But in the Senate version passed by the HELP committee, there is no real requirement for employers to provide any kind of minimal level of care. On the contrary, employers who currently offer sub-par coverage will have their shitty plans protected by a grandfather clause. Which means …

“If you have coverage you like, you can keep it,” says Sen. Sanders. “But if you have coverage you don’t like, you gotta keep it.”

This grandfather clause has potentially wide-ranging consequences. One of the biggest health care problems we have in this country is the technique used by large employers — Walmart is the most notorious example — of offering dogshit, bare-bones health insurance that forces employees to take on steep co-pays and other massive charges. Low-wage workers currently offered these plans often reject them and join Medicaid, effectively shifting the health care burden for Walmart employees on to the taxpayer. If the HELP committee’s grandfather clause survives to the final bill, those workers who did the sensible thing in rejecting Walmart’s crap employer plan and taking the comparatively awesome insurance offered via Medicaid will now be rebuffed by the state and forced to take the dogshit Walmart offering.

This works out well for the states, who will get to purge all those Walmart workers from their Medicaid rolls. It also works great for Walmart, since any new competitors who appear on the horizon will be forced to offer genuine and more expensive health insurance — giving Walmart a clear competitive advantage. This little “glitch” is the essence of the health care reform effort: It changes things in a way that works for everyone except actual sick people.

Veteran legislators speak of this horrific loophole as if it were an accident — something that just sort of happened, while no one was looking. Sen. Ron Wyden of Oregon was looking at an early version of the bill several months ago, when he suddenly realized that it was going to leave people stuck with their employer insurance. “I woke up one morning and was like, ‘Whoa, people aren’t going to have choices,’” he recalls.

As a means of correcting the problem, Wyden wrote up a thing called the Free Choice Act, which like many of the prematurely sidelined ideas in this health care mess is actually quite sensible. The bill would open up the insurance “exchanges” to all consumers, regardless of who is offered employer-based insurance and who isn’t. But Wyden has little hope of having his proposal included in later versions of the bill. Like Sanders, who hopes to correct the committee’s giveaway to drugmakers, Wyden won’t get a real shot at having an impact until the House and Senate meet to hammer out differences between their final bills. In a legislative sense, the bad ideas are already in the barn, and the solutions are fenced off in the fields, hoping to get in.

STEP FOUR: PROVIDE NO LEADERSHIP

One of the reasons for this chaos was the bizarre decision by the administration to provide absolutely no real oversight of the reform effort. From the start, Obama acted like a man still running for president, not someone already sitting in the White House, armed with 60 seats in the Senate. He spoke in generalities, offering as “guiding principles” the kind of I’m-for-puppies-and-sunshine platitudes we got used to on the campaign trail — investment in prevention and wellness, affordable health care for all, guaranteed choice of doctor. At no time has he come out and said what he wants Congress to do, in concrete terms. Even in June, when congressional leaders desperate for guidance met with chief of staff (and former legislative change-squelcher) Rahm Emanuel, they got no signal at all about what the White House wanted. On the question of a public option, Emanuel was agonizingly noncommittal, reportedly telling Senate Democrats that the president was still “open to alternatives.”

On the same day Emanuel was passing the buck to senators, Obama was telling reporters that it’s “still too early” to have a “strong opinion” on a public option. This was startling news indeed: Eight months after being elected president of the United States is too early to have an opinion on an issue that Obama himself made a central plank of his campaign? The president conceded only that a “public option makes sense.”

This White House makes a serial vacillator like Bill Clinton look like Patton crossing the Rhine. Veterans from the Clinton White House, in fact, jumped on Obama. “The president may have overlearned the lesson of the Clinton health care plan fiasco, which was: Don’t deliver a package to the Hill, let the Hill take ownership,” said Robert Reich, who served as labor secretary under Clinton. There were now so many competing ideas about how to pay for the plan and what kind of mandates to include that even after the five bills are completed, Congress will not be much closer to reform than it was at the beginning. “The president has got to go in there and give it coherence,” Reich concluded.

But Reich’s comment assumes that Obama wants to give the bill coherence. In many ways, the lily-livered method that Obama chose to push health care into being is a crystal-clear example of how the Democratic Party likes to act — showering a real problem with a blizzard of ineffectual decisions and verbose nonsense, then stepping aside at the last minute to reveal the true plan that all along was being forged off-camera in the furnace of moneyed interests and insider inertia. While the White House publicly eschewed any concrete “guiding principles,” the People Who Mattered, it appeared, had already long ago settled on theirs. Those principles seem to have been: no single-payer system, no meaningful public option, no meaningful employer mandates and a very meaningful mandate for individual consumers. In other words, the only major reform with teeth would be the one forcing everyone to buy some form of private insurance, no matter how crappy, or suffer a tax penalty. If the public option is the sine qua non for progressives, then the “individual mandate” is the counterpart must-have requirement for the insurance industry.

“That was their major policy ‘ask,’ and it looks like they’re going to get it,” says Dr. Steffie Woolhandler, a Boston physician who is a prominent single-payer advocate.

The so-called “individual mandate” is currently included in four of the five bills before Congress. The most likely version to survive into the final measure resembles the system in Massachusetts designed by Mormon glambot Mitt Romney, who imposed tax penalties on citizens who did not buy insurance. Several of Romney’s former advisers are involved in the writing of Obamacare, including a key aide to Ted Kennedy who was instrumental in designing the HELP committee legislation. The federal version of the Massachusetts plan would slap the uninsured with a hefty tax penalty — making the HELP committee clause barring people from opting out of their employer-provided plan that much more outrageous.

If things go the way it looks like they will, health care reform will simply force great numbers of new people to buy or keep insurance of a type that has already been proved not to work. “The IRS and the government will force people to buy a defective product,” says Woolhandler. “We know it’s defective because three-quarters of all people who file for bankruptcy because of medical reasons have insurance when they get sick — and they’re bankrupted anyway.”

STEP FIVE: BLOW THE MATH

Health care is a beast — a monster. The House 3200 bill alone is 1,017 pages long and contains countless inscrutable references to other pieces of legislation, meaning that in order to fully comprehend even those thousand pages one really has to read upward of 9,000 or 10,000 pages. There are five different versions of this creature, each with its own nuances and shades, and solving a highly complex mathematical challenge like reconciling the costs of each of the five plans would be beyond even minds who were (a) expert at such things and (b) motivated to get it right. Imagine the same problem in the hands of a bunch of second-rate country lawyers and mall owners, and you about get the idea of what the congressional picture looks like.

For instance: All five of the bills envision a significant expansion of Medicaid. As it stands, the LBJ-era program, which celebrated its 44th birthday on the day before Nancy Pelosi laughed at the progressives, awards benefits according to a jumbled series of state-by-state criteria. Some states, like Vermont, offer Medicaid to citizens whose income is as high as 300 percent of the federal poverty level, while others, like Georgia, only offer Medicaid to those closer to or below the poverty level.

The House plan would expand Medicaid eligibility to automatically include every American whose income is 133 percent of the poverty level or less. For those earning somewhat more — up to 400 percent of the poverty level — federal subsidies would help pay for the cost of a public or private plan purchased via the insurance “exchanges.” That worries state governments, which currently pay for almost half of Medicaid — and which are already seeing their Medicaid rolls swelled by the economic meltdown. A massive surge in new Medicaid members — as many as 11 million Americans under the current proposals, according to the Congressional Budget Office — might literally render many big states insolvent overnight.

Democrats pointed out that under the House plan, the federal government would pay the costs of any “newly eligible” members of Medicaid. But that phrasing, it turns out, was a semantic trick designed to undersell the cost to the states. When Massachusetts imposed a similar mandate under Romney, thousands of people who were already eligible for Medicaid, but had not enrolled, immediately joined the program in order to avoid the tax penalty for being uninsured. So while the House plan would pay for “newly eligible” patients, it won’t cover the “oldly eligible.”

Congress in this instance is behaving like corporations in the Enron age, orphaning hidden costs and complications through clever wording and accounting. Another neat trick involves the federal subsidies for low-income people who make up to 400 percent of the poverty level. The Congressional Budget Office projects that under the House bill, the subsidies will cost upward of $773 billion by 2019. But some aides think that number could end up being much higher. “Without a real public option to drive down costs, the federal support to make sure everyone gets coverage is going to get very expensive very fast,” says Behan, the aide to Sen. Sanders.

Here’s the other thing. By blowing off single-payer and cutting the heart out of the public option, the Obama administration robbed itself of its biggest argument — that health care reform is going to save a lot of money. That has left the Democrats vulnerable to charges that the plan is going to blow a mile-wide hole in the budget, one we’ll be paying debt service on through the year 3000. It also left them scrambling to find other ways to pay for the plan, making it almost inevitable that they would step in political shit with seniors everywhere by trying surreptitiously to whittle down Medicare. As a result, the Democrats have become so oversensitive to charges of fiscal irresponsibility that they’re taking their frustrations out on people who don’t deserve it. Witness Nancy Pelosi’s bizarre freakout over the Congressional Budget Office. When the CBO questioned Obama’s projected cost savings, Pelosi blasted them for “always giving you the worst-case scenario” — which, of course, is exactly what the budget office is supposed to do. When you start asking your accountant to look on the bright side, you know you’re not dealing from a position of strength.

To recap, here’s what ended up happening with health care. First, they gave away single-payer before a single gavel had fallen, apparently as a bargaining chip to the very insurers mostly responsible for creating the crisis in the first place. Then they watered down the public option so as to make it almost meaningless, while simultaneously beefing up the individual mandate, which would force millions of people now uninsured to buy a product that is no longer certain to be either cheaper or more likely to prevent them from going bankrupt. The bill won’t make drugs cheaper, and it might make paperwork for doctors even more unwieldy and complex than it is now. In fact, the various reform measures suck so badly that PhRMA, the notorious mouthpiece for the pharmaceutical industry which last year spent more than $20 million lobbying against health care reform, is now gratefully spending more than seven times that much on a marketing campaign to help the president get what he wants.

So what’s left? Well, the bills do keep alive the so-called employer mandate, requiring companies to provide insurance to their employees. A good idea — except that the Blue Dogs managed to exempt employers with annual payrolls below $500,000, meaning that 87 percent of all businesses will be allowed to opt out of the best and toughest reform measure left. Thanks to Harry Reid, Nancy Pelosi and Barack Obama, we can now be assured that the 19 or 20 employers in America with payrolls above $500,000 who do not already provide insurance will be required to offer good solid health coverage. Hurray!

Or will they? At the end of July, word leaked out that the Senate Finance Committee, in addition to likely spiking the public option, had also decided to ditch the employer mandate. It was hard to be certain, because even Democrats on the committee don’t know what’s going on in the Group of Six selected by Baucus to craft the bill. Things got so bad that some Democrats on the committee — including John Kerry, Chuck Schumer and Robert Menendez — were reduced to holding what amounts to shadow hearings on health care several times a week, while Baucus and his crew conducted their meetings in relative secrecy. The chairman did not even bother to keep his fellow Democrats informed of the bill’s developments, let alone what he has promised Republicans in return for their support of the bill. “The Group of Six has hijacked the process,” says an aide to one of the left-out senators.

This leaves Democrats on the committee in the strange position of seriously considering pulling their support for a bill that will emerge from a panel on which they hold a clear majority. Other Democrats are also weighing an end run around their own leadership, hoping to sneak meaningful reforms back into the process. In the House, Rep. Anthony Weiner of New York refused to support the bill passed by the commerce committee unless he was allowed to attach an amendment that will enable Congress to vote on replacing the entire reform bill with a single-payer plan (Bernie Sanders is working on a similar measure in the Senate). On the labor committee, Rep. Dennis Kucinich of Ohio took a more nuanced tack, offering an amendment that would free up states to switch to a single-payer system of their own.

It’s highly unlikely, though, that the party’s leaders will agree to include such measures when the five competing reform bills are eventually combined. On the House side, “Pelosi has unfettered discretion to combine the bills as she pleases,” observes one Democratic aide. Which leaves us where we are today, as Congress enjoys its vacation, and the various sides have taken to the airwaves in an advertising blitz to make sure the population is saturated with idiotic misconceptions before the bill is actually voted on in the fall.

The much-ballyhooed right-wing scare campaign, with its teabagger holdovers ridiculously disrupting town-hall meetings with their belligerent protests and their stoneheaded memes (the sign raised at a town hall held by Rep. Rick Larson of Washington — keep the guvmint out of my medicare — is destined to become a classic of conservative propaganda), has proved to be almost totally irrelevant to the entire enterprise. Aside from lowering even further the general level of civility (teabaggers urged Sen. Chris Dodd to off himself with painkillers; Rep. Brad Miller had his life threatened), the Limbaugh minions have accomplished nothing at all, except to look like morons for protesting as creeping socialism a reform effort designed specifically to change as little as possible and to preserve at all costs our malfunctioning system of private health care.

All that’s left of health care reform is a collection of piece-of-shit, weakling proposals that are preposterously expensive and contain almost nothing meaningful — and that set of proposals, meanwhile, is being negotiated down even further by the endlessly negating Group of Six. It is a fight to the finish now between Really Bad and Even Worse. And it’s virtually guaranteed to sour the public on reform efforts for years to come.

“They’ll pass some weak, mediocre plan that breaks the bank and even in the best analysis leaves 37 million people uninsured,” says Mokhiber, one of the single-payer activists arrested by Baucus. “It’s going to give universal health care a bad name.”

It’s a joke, the whole thing, a parody of Solomonic governance. By the time all the various bills are combined, health care will be a baby not split in half but in fourths and eighths and fractions of eighths. It’s what happens when a government accustomed to dealing on the level of perception tries to take on a profound emergency that exists in reality. No matter how hard Congress may try, though, it simply is not possible to paper over a crisis this vast.

Then again, some of the blame has to go to all of us. It’s more than a little conspicuous that the same electorate that poured its heart out last year for the Hallmark-card story line of the Obama campaign has not been seen much in this health care debate. The handful of legislators — the Weiners, Kuciniches, Wydens and Sanderses — who are fighting for something real should be doing so with armies at their back. Instead, all the noise is being made on the other side. Not so stupid after all — they, at least, understand that politics is a fight that does not end with the wearing of a T-shirt in November.

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Financial Crisis Called Off

James Howard Kunstler

Whew, what a relief!  Everybody from Ben Bernanke and a Who’s Who of banking poobahs schmoozing it up in the heady vapors of Jackson Hole, Wyoming, to the dull scribes at The New York Times, toiling in their MC Escher hall of mirrors, to poor dim James Surowiecki over at The New Yorker, to – wonder of wonders! – the Green Shoots claque at the cable networks, to the assorted quants, grinds, nerds, pimps, factotums, catamites, and cretins in every office from the Bureau of Labor Statistics to the International Monetary Fund – every man-Jack and woman-Jill around the levers of power and opinion weighed in last week with glad tidings that the world’s capital finance system survived what turned out to be a mere protracted bout of heartburn and has been reborn as the Miracle Bull economy. Our worries over.  If you believe their bullshit.  Which I don’t.

All this goes to show is how completely the people in charge of things in the USA have lost their minds.  They seem to think this mass exercise in pretend will resurrect the great march to the WalMarts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing, and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park “capacity” and Big Box “power centers,” restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world – all this while turning Afghanistan into a neighborhood that Beaver Cleaver would be proud to call home.

By the way – and please pardon the rather sharp digression – but does anybody know if they buried Michael Jackson yet?  It’s only been a couple of months. And, if not, is that the stench now wafting across the purple mountains’ majesty from sea-to-shining sea? Isn’t it a little indecent to keep the poor fellow waiting?  Or is a really surprising comeback secretly planned, with product tie-ins and all?

America loves the word “recovery” as only a catastrophically sick society can. “In recovery” is the new universal mantra of loser individuals and loser nations.  Everybody in the USA is in recovery.  Even Michael Jackson (he may have given up on somatic activity but, on the plus side, as the Rotarians love to say, he’s quit using drugs for once and for all, and the magazines have stopped publishing photos of him taken after 1990, when he turned himself into something out of the Hammer Films catalog).

To sum it all up, the US economy is in recovery.  Paul Krugman says that we’ll soon realize that Gross Domestic Product (GDP) is growing.  He actually said that on the Sunday TV chat circuit. Not to put too fine a point on it, but I would really like to know what you mean by that Paul, you fatuous wanker.  Do you mean that the Atlanta homebuilders are going to open up a new suburban frontier down in Twiggs County so that commuters can enjoy driving Chrysler Crossfires a hundred and sixty miles a day to new jobs as flash traders in the Peachtree Plaza?  Do you mean that the Home Equity Fairy is going to wade into the sea of foreclosure and save twenty million mortgage holders currently sojourning in the fathomless depths with the anglerfish?  Do you mean that all the bales of deliquescing, toxic “assets” hidden in the vaults of Citibank, JP Morgan, Bank of America, et al, (not to mention on the books of every pension fund in the USA, and not a few elsewhere) will magically turn into Little Debbie Snack Cakes on Labor Day weekend?  Do you mean that American Express and Master Card are about to declare a Jubilee on accounts in default everywhere?  Do you mean that General Motors will produce a car that a.) anyone really wants to buy and b.) that the company can sell at a profit?  Are you saying we get a do-over, going back to, say, 1981?  Did we win some cosmic lottery that hasn’t been announced yet?  What’s growing in this country besides unemployment, bankruptcy, repossession, liquidation, gun ownership, and suicidal despair?  In short, are you out of your mind, Paul Krugman?

The key to the current madness, of course, is this expectation, this wish, really, that all the rackets, games, dodges, scams, and workarounds that American banking, business, and government devised over the past thirty years – to cover up the dismal fact that we produce so little of real value­ these days – will just magically return to full throttle, like a machine that has spent a few weeks in the repair shop. This is not going to happen, of course.  It is permanently and irredeemably broken – this Rube Goldberg contraption of swindles all based on the idea that it’s possible to get something for nothing. And more to the point, we’re really doing nothing to reconstruct our economy along lines that are consistent with the realities of energy, geopolitics, or resource scarcity.  So far, our notions about a “green” economy amount to little more than blowing green smoke up our collective ass.  We think we’re going to build “green” skyscrapers! We’re too dumb to see what a contradiction in terms this is. The architects are completely uninterested in the one thing that really is “green” – traditional urban design – and most particularly the walkable neighborhood.  That’s just too conventional, not special enough, lacking in star power, not enough of a statement, boring, tedious, so not cutting edge! We blather about high speed rail, but you can’t even get from Cleveland to Cincinnati on a regular train – and what’s more amazing, nobody is really interested in making this happen.  All we really care about is finding some miracle method to keep all the cars running.

What we’ve been seeing is nothing more than a massive pump-and-dump operation in the stock markets, most of it executed by programmed robot traders, with the trading nut provided by taxpayers current and future.  These shenanigans add up to new risks and fragilities so extreme that the next time a grain of sand catches in the exquisite machinery they will sink the USA as a viable enterprise.  We will end up discrediting not just capitalism, but also the idea of capital per se, that is, of deployable acquired wealth.  As this occurs, of course, events on-the-ground will give new meaning to the term “reality television.”

The Importance of Harmony

Arthur Noll

I started thinking about problems bigger than myself more than twenty years ago, reading E.F. Shumacher’s book, “Small is Beautiful”.  If you haven’t read it, the central premise of that book, was that people acted as though the “problems of production”, the way we got basics like food, water, clothes and shelter, had been solved.  He was an economist with personal experience with coal mines being worked out, when he looked at the finite supply of fossil fuel and all that it supported, he realized that we didn’t really know how to live in a sustainable way.  I’ve taken that as the premise for what I’ve worked on in the last twenty years, that we don’t know, right down at the base of things, how to live.  Nothing I’ve learned since then, has made me change my mind about this premise, though I’ve had to change my mind about many other things as I got closer to the reality of things.  I had to quit being a vegetarian,  for one example.  And reduce my expectations of renewable energy sources.  Yet I did find things that worked with unexpected ease and beauty.  Like living in a canvas yurt, herding goats, gathering wild vegetables, tending trees, and many other things.  I’ve indulged my talents as a mechanical design engineer and come up with some modifications on old ideas, that seem to work better.

Most importantly, I’ve made observations about human nature, and human needs and social structure, to solve the problem of the premise that we don’t know how to live sustainably with nature and each other.  Basically, I think instincts formed in the stone age, prevent most of us from acting rationally with regard to sustainability, and how we treat each other.  Technology that enables us to take more from nature than can be sustained over generations, is judged to be an unqualified good thing by most people.  Long term awareness of problems doesn’t compete with their short term drives.  If a cow gets into a grain bin, they literally eat themselves to death.  Technologists have claimed over and over that their inventions have overturned the balance of nature. When we discovered hard, tough metals, we found the key to the “grain bin”, and have been gorging without restraint ever since.  The world was a large grain bin, and it has taken about three thousand years to get to this point, where the stomach ache is getting severe.

I am moved to say something about business.  I occasionally hear people  say that they are not anti business, but only against what businesses often do.  I agree that the actions are often abhorrent.  The trouble I see, is that businesses act as they do in response to forces that are inherent in the system that they operate in.  So I have to be against capitalism, against markets, if I have seen these webs of cause and effect properly.  Let me outline the major problems I see.

The fundamental rule of markets, is that they value abundant things as cheap.  This causes all sorts of trouble, because it is an inherent incentive to ignore conservation of resources.  If it is cheap, you use it.  You don’t worry much about waste  and sustainability.  Economic models assume that as resources are used, prices will go up, and cause conservation, but the factors seldom work as smoothly as that.   Resources can be so abundant that prices don’t rise in response to shortages, until several generations of people have increased population on them.  Then you may well be trapped with unsustainable numbers of people. I think this is how we find ourselves right now.

Another problem is that it is an observable fact that people are interdependent.  Yet using money makes people into independent agents, everyone is doing their own thing to the highest degree possible.  Anyone who has played the game  Monopoly, knows that someone “wins”, they end up owning everything. Real life markets are not much different. A few people “own” nearly everything, the rest are collecting a paycheck as they go around the board, and do well to stay even as they go around.  This way of playing at independence from everyone else, exacerbates the market forces that label things as either cheap, or expensive. If you are bringing in a resource that is considered cheap, you have to bring in lots and lots of it, in order to make a living. This will definitely ignore the balance of nature.   Something considered highly desirable, may bring a high price, which doesn’t protect it, people find it worth the time and energy to go out and hunt down a scarce but desired resource.  Abundant people are considered cheap, even though we are clearly interdependent with each other, and no one who contributes in a positive manner can really be considered cheap, expendable.

Abundant people who act to exploit nature in unsustainable ways, will be treated as expendable by nature, however.

Garrett Hardin wrote about the “Tragedy of the Commons”, where people acting in their own interest, as independent agents, will destroy resources held in common.  It is felt that ownership of land, of resources, will prevent this problem, but it doesn’t.  If your neighbor is exploiting the resources of his land, and sells cheaper than you, it doesn’t matter if his practices are not sustainable over the long term.  Over the short term, if you don’t match his production, meet his prices, you will lose your piece of land.

Over the short term, markets reward those who exploit nature and other people.  Over the long term, exploitation fails to compete, it runs out of energy.  Nature always swings the balance back in the end.